More Articles

The Dispatch E-Edition

All current subscribers have full access to Digital D, which includes the E-Edition and
unlimited premium content on Dispatch.com, BuckeyeXtra.com, BlueJacketsXtra.com and
DispatchPolitics.com.
Subscribe
today!

NEW YORK — Family Dollar Stores Inc., facing a threat from billionaire activist Carl Icahn,
adopted a shareholder-rights plan that will limit investors from acquiring more than 10 percent of
the company.

All but one of Family Dollar’s directors voted for the plan, which will last one year, according
to a statement yesterday. Edward Garden, who was added to the board as part of an agreement with
shareholder Trian Fund Management in 2011, voted against it.

Family Dollar is adding the so-called poison pill after Icahn disclosed he had amassed a new 9.4
percent stake and would seek talks with management — a move that sent the shares up as much as 16
percent. He might push for operating changes and ask the company to explore strategic alternatives,
as well as potentially seek board seats, according to a filing.

“Carl Icahn is not someone who’s taken lightly,” Anthony Chukumba, a New York-based analyst at
BB&T Corp., who has a hold rating on the stock, said last week. “He has a track record.”

Family Dollar, a chain of budget stores based in North Carolina, has been struggling to compete
with rival discounters, drugstores and big-box retailers such as Target Corp. and Wal- Mart Stores.
To combat slumping sales, the company embarked on a review of its business this year. As part of
its turnaround plan, Family Dollar is
closing about 370 underperforming stores and opening fewer new ones. It’s also
lowering prices in a bid to entice shoppers.

Trian, a firm run by billionaire Nelson Peltz, made a takeover offer for the retailer in 2011 in
an attempt to attract other suitors. Family Dollar CEO Howard Levine was reluctant to sell the
company his father founded, and no other bidders emerged. The investor ultimately withdrew its
offer as part of an agreement that added Garden to the board. Trian remains one of Family Dollar’s
biggest shareholders, with a stake of about 7.4 percent.

As an activist investor, Icahn has been an antagonist to management at companies such as Apple,
Netflix and Dell. Icahn and his affiliates bought 10.7 million shares and options for about $265.8
million, according to a filing on Friday with the Securities and Exchange Commission. The
billionaire hopes “to continue our streak of value enhancement,” he said in a Twitter posting.